Duliajan (Assam), Feb 19: The Oil India Limited (OIL) has decided to offer Initial Public Offering (IPO) to raise around Rs 1,474 crore for its expansion plans in its Golden Jubilee year.
OIL Chairman and Managing Director (CMD) M K Pasrija said here yesterday that in order to fund its ambitious growth plans in exploration and production activities, the OIL has a plan outlay of Rs 4,575 crore for two years which is supposed to be met through internal resources and IPO.
Undaunted by the volatile Indian stock market as well as crash of three major IPOs, which included Reliance Power of the Anil Dhirubhai Ambani Group, the OIL will go ahead with the IPO to raise USD 378 million after March.
''We need not pull back as far as our offer is concerned, we have very strong fundamentals and nothing should come in the way,'' the CMD said.
The Red Herring Prospectus covers for an IPO of 2,64,49,982 equity shares of Rs 10 each at a price to be decided through the book-building process, which will constitute 11 per cent of the fully diluted post-issue paid-up capital of the company, supposed to be listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).
Basking in the glory of the Golden Jubilee celebrations, which commenced yesterday near here at Naharkatiya, where the first oil well of the Independent India was dug, the OIL is confident of doing well in the IPO.
The OIL, a public sector undertaking engaged in the hydrocarbon exploration business, has firmed up plans to increase its capital expenditure in exploration activities in NELP blocks as well as in its JV blocks abroad.
The company has made an outlay of Rs 2,230.67 crore for the year 2008-09 compared to Rs 1,705.68 crore last year. According to the CMD, the outlay includes expected expenditure in respect of overseas exploration projects and pipeline projects both in India and abroad.
According to the CMD, the investment would be in sectors like seismic survey, exploration drilling, development drilling and capital equipment and facilities to enhance production in the future. The company is also investing in overseas projects in countries like Libya, Gabon and Nigeria, among others. In this regard, the company has signed a MoU with the IOC for jointly acquiring producing properties of oil and gas in overseas ventures.
The company so far has 20 per cent interest in Farsi Offshore block in Iran along with IOC (40 per cent stake) and OVL (40 per cent). In Sudan, the OIL is involved in a pipeline project with the OVL and in Libya, it has a joint venture with the IOC. Both the companies have 50 per cent stake in the block and OIL is the operator.
The company is also considering enhancing equity participation in downstream projects. With a view to further integrating itself along the oil and gas value chain in India, it is actively pursuing improving equity participation.
The OIL is in the process of setting up a product pipeline from Numaligarh to Siliguri along with the Assam Gas Company. The company has already obtained approval for the same and the initial work is expected to be completed by March 2008, as per schedule.
According to company sources, the net internal resource available for plan expenditure during the year 2008-09 is estimated at Rs 2,055.68 crore compared to last year in respect of assumption of higher production (3.50 MMT) from (3.20 MMT) last year.
The OIL, the pioneer in crude oil transportation in Southeast Asia, owns and operates 1,432 km of cross-country crude oil pipelines. Commissioned in 1962, the OIL's crude oil pipeline traverses 79 river crossings, including the Brahmaputra river, and moves through paddy fields, tropical rain forests and the world's greatest watershed zone - the Teesta Area.